Refer to the figure. Assuming this market is representative of the economy as a whole, this economy:
A. is highly susceptible to inflation.
B. faces fluctuating output levels whenever there is a demand shock.
C. is capable of always producing at its optimal capacity.
D. is largely immune to business cycles.
B. faces fluctuating output levels whenever there is a demand shock.
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In the classical model, real Gross Domestic Product (GDP) per year is
A) determined by supply and demand conditions together. B) supply determined. C) demand determined. D) due to supply conditions plus the extent of government intervention in the economy.
The above table has data from the nation of Atlantica. Based on these data, when disposable income equals 8.0 there is
A) dissavings of $0.5 trillion. B) dissavings of $15.5 trillion. C) savings of $15.5 trillion. D) savings of $0.5 trillion. E) dissavings of $7.5 trillion.
Which of the following is likely to cause a rise in the wage rate and a decrease in the number of workers hired in a garage?
A) The shutdown of a nearby garage B) A decrease in the price of the services provided by the garage C) An increase in the price of the services provided by the garage D) The opening of a new garage nearby that offers higher wages to its workers
A free rider problem is created by private goods
Indicate whether the statement is true or false